The structure and function of the promoter of the human dihydrofolate reductase (DHFR) gene have been studied. An extensive mapping study of RNA from methotrexate resistant HeLa cells, using a single strand RNA probe, identified a cluster of minor initiation sites about 400 bp upstream from the major initiation site for DHFR mRNA. In addition, we identified about 300 nucleotides of RNA which initiates at position -90 and is transcribed from the opposite strand to that coding for DHFR mRNA. Another opposite strand transcript initiated at position -600 was detected using an in vitro transcription system. A series of deletion mutants of the DHFR gene promoter were fused to the DHFR coding sequence (DHFR minigene) or to the bacterial chloramphenicol acetyltransferase gene (DHFR-CAT). RNA analysis of monkey kidney Cos cells transfected with the DHFR minigene showed the 72 bp upstream sequence is sufficient for correct initiation. Deletional analysis using the DHFR CAT vectors identified two activation sequences from -610 to -360 and from -109 to -72. All these cis-acting regulatory elements were found to be located in the previously defined nucleosome free region. The promoter binding proteins, which have important roles in establishing and maintaining the nucleosome free structure, were partially purified and characterized.